Doing market research is a crucial step to determine if your business will likely survive and thrive. First, you need to identify who your target market will be, such as the specific demographics your product or service will most appeal to. Secondly, you need to figure out what will differentiate your brand from that of your competitors that will make your product or service more appealing to your target market. Does your business offer something exclusive that cannot be found elsewhere, or do you provide something better than your competition – better prices, superior service, extra services for free, etc?
You need to establish a spot for your business in your chosen field where you excel and can make a name for yourself, and then you need to determine how much your target market would be willing to pay for your product or service. By conducting market research, you can often find out which services or certain attributes matter most to your target market and how much they may be willing to spend in order to have what your business provides.
By using market research techniques such as surveys, focus groups, interviews, and examining other existing data sources that are available to you, such as competitor data, about your target market, you can learn a great deal of valuable information. You can find out where your market is located, better determine who your potential customers are, what the competition is like and much more.
Market research is an invaluable step when considering starting your own business and it will help you to know if there is a demand for what you are offering, to discover what you may need to change about your product or service in order to make it more appealing to your target market, and to better understand the competition that you will be up against in your chosen niche.
To learn more about the process of market research and for examples of how this has helped other businesses to succeed, please see our extensive article, “How to do Market Research.”